Despite the gain in the blue-chip index, declining issues led advancers by 6 to 5 on the New York Stock Exchange. Volume was moderate but down from yesterday's pace.

Bond prices dropped sharply this morning, dragging stocks lower, after the Commerce Department said orders to U.S. factories for big-ticket durable goods shot up 4.6 percent in September, the steepest jump in nearly four years. But the report's impact was muted as Commerce pinned much of the advance on aircraft orders.

Bonds recovered after The National Association of Realtors said September existing home sales fell 2.9 percent. The long bond was up 9-16 point and yielding 6.80 percent.

The housing data "reconfirmed that the economy slowed in September," said Hugh Johnson, market strategist at First Albany Corp.